The value of Gold comes from its role as money, not from its industrial uses.
Gold has an enormous stockpile to supply ratio. It has been stored - over 2000 years! - precisely because it is money, not an industrial metal.
If Gold was only an industrial metal then its supply profile would be that of an industrial metal. Users would keep just what they needed at hand to minimize warehousing costs.
But Gold’s value comes from its status as money. It has value because it possesses all of the properties of money. And money is stored. It retains value, so it is stored. Whereas nobody’s going to stockpile Lithium for 2000 years.
Not many things are truly money. Many people have difficulty realizing this, as the fiat currency in their pocket has *most* of the properties of money. It’s good enough - for now.
But fiat currency is not a store of value. In that sense it is not money. For instance: the dollar in your pocket is currently depreciating at about 7% a year.
This is because its only value comes from Government guarantee. The Government is hopelessly bankrupt and must create trillions more fiat dollars to meet its debts. It is doing this in a more or less controlled way: in the meantime the dollar is hemorrhaging buying power.
Gold is *also* depreciating in the short term. This is because of the vast supply of fake, not-real, paper promises of Gold that has been created solely to suppress the price of Gold.
Gold is suppressed because the Government needs time to devalue the dollar without causing too much friction - and if Gold were allowed to rise in line with the currency supply then they’d have no time at all. Everyone would ditch the dollar and jump into Gold.
But eventually Government intervention fails and the market has its say. The price of Gold will rise to a price where it accounts for the currency supply. This is well north of 5000 dollars per ounce in today’s currency.
Hope this proves helpful.
“The value of Gold comes from its role as money, not from its industrial uses.”
Which country’s currency are you arguing is gold?
The money value of gold arises from the same source as the money value of the currency in your pocket, namely that it is an accepted means of exchange. If gold is no longer acceptable generally as a means of exchange, it is (mostly. I do realize there are industrial uses) useless. Gold has no more intrinsic value than does US currency (or any other currency). Both are accepted as means of exchange. The only value of gold over currencies is that currencies derive their value from specific governments, whereas gold has traditionally served as a money independent of specific governments. However, if you were in a situation where gold was NOT traditionally used as such (see my example in a previous post regarding dealing with islanders living on a remote Pacific island, for example), gold would have no real value.
Short version: Gold has value because people and societies traditionally have regarded it as valuable, not because there is anything intrinsically valuable about gold.